February 18, 2021

CEO Frans Muller talks Ahold Delhaize

Frans Muller, Ahold CEO (photo: Philipp von Bruchhausen)
(photo: Philipp von Bruchhausen)
Ahold Delhaize CEO Frans Muller
Ahold Delhaize continues to fulfil its destiny as an omni-channel success machine. Nowhere can you see this better than in cyberspace. The Dutch-Belgian retail giant wants to push online sales strongly again this year by at least 30 per cent. This would mean an estimated €9.8bn in net digital sales, including marketplace revenues.
The historic company, whose shares are listed on the Amsterdam bourse, has just issued some pretty sprightly figures for 2020. Its supermarkets, convenience stores and digital operations in the Benelux, CEE as well as the US posted a stomping €75bn in net sales.

This represents a massive online plus of 67 per cent and like-for-likes of 13 per cent for bricks & mortar.

But the Covid pandemic fuelled all system-relevant retailers last year, and most customers will get their jabs in 2021 as society comes out of lockdown. Meanwhile, corona-related costs have cut operating income by 16.6  per cent.

So, should the champagne corks be popping again at HQ in Zaandam? We asked the boss...

We haven't asked for a cent"
Ahold Delhaize CEO Frans Muller (photo: Philipp von Bruchhausen)
Philipp von Bruchhausen
Frans Muller
Frans Muller, many non-food retailers have had to close during the Covid crisis while your sales have boomed. Do you understand those politicians who are calling for a windfall tax on large grocers such as yourself?

This issue is part of a broader social debate, and we believe that any such question must be left to the new government cabinet in the Netherlands. However, I would like to say here that our company is very close to the 7,000 international communities we serve. This is why we have invested heavily in Covid-related care, which we feel is part of our social responsibility. We are also very reliable taxpayers.

What do you mean by heavy investment?

Last year, we invested more than €680m to protect our customers and staff, pay our associates additional bonuses and to make charitable donations. We have also committed ourselves to providing €1.5bn in pension provisions. We created 45,000 additional jobs during the pandemic in order to continue providing customers with food.

Last but not least, our online platforms also offer a marketplace to many traders who might otherwise have gone out of business. We now have 42,000 commercial users on bol.com alone.

What type of bonuses have you paid your employees?

Two masked store staff in a Belgian Delhaize store (photo: Ahold Delhaize)
Ahold Delhaize
Covid bonus: Perhaps these two staff members in a Delhaize store in Belgium are celebrating their extra vacation...
The exact form varied from country to country depending on the local situation. In the Netherlands, for example, all of our 100,000-odd employees participate in a profit-sharing scheme, so they automatically benefited from our good results. We also paid them a bonus of 15 per cent on their four-week salary.

In other countries, we have paid one-off bonuses and issued food vouchers, or in Belgium, for example, we increased staff vacation.

Have you received any state aid?

No, not a cent. We didn't even apply for any despite having to close some Albert Heijn stores in the Netherlands for health reasons and having fewer tourist-customers in large international cities such as Bucharest, Amsterdam or Prague.

In 2020, your online sales increased by two-thirds. Why are you aiming for an increase of 'only' 30 per cent this year?

Of course, the tragic Covid pandemic has distorted all the numbers and far outstripped our previous growth plans. Therefore, a comparison with 2019 would actually be more appropriate. The online growth we are aiming at this year must be compared to the base value of an exceptionally strongly 2020.

In non-food, you are already profitable on bol.com. When will your online food operations be in the black?

Female US store member in mask (photo: Ahold Delhaize)
Ahold Delhaize
This American lady's company pension got a good deal safer in 2020...
Within the next couple of years. We're already profitable with food in big cities such as Amsterdam, Rotterdam or Boston. Here we have high population densities and thus the necessary economies of scale to compensate for the particularly expensive 'last mile' of home deliveries.

Your question, however, is almost old-fashioned, if I may say so. A retailer can even lose those customers who mainly shop in physical stores if they are also not offered an online alternative. Omni-channel customers also spend more on average than customers who only shop in stores or only online.

Has the Covid crisis had any lasting impact on your M&A pans?

Hardly. We still have an active agenda. As in the past, our acquisitions are not about big or small, but whether they fit our strategic goals. The only difference is that we now look for physical space and online expertise as can be seen by our recent purchases on both sides of the Atlantic.

Lebensmittel Zeitung print and digital (photo: LZ)
Our German retail B2B newspaper, Lebensmittel Zeitung, in print & digital
Read in German
: 'Ahold Delhaize wächst rasant' & 'Wir werden auch mit Online-Food in den nächsten paar Jahren profitabel' by international editor Mike Dawson on page 12 of Lebensmittel Zeitung, no. 7, 19.02.2021

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